If you have other
questions or issues within the area of
responsibility of the FSCU, Department of
Finance, please call the FSCU Hotline at
324-0385 or e-mail
FSCUHotline@dof.ca.gov. If your question(s)
requires a detailed analysis, forward a letter
to, FSCU, Department of Finance, 915 L Street,
Sacramento, CA 95814, IMMS A-15.

The California
Constitution Article XVI, Sec. 3 and Sec. 6,
prohibits gifts/donations of public funds. Since
the State has received no benefit and the
subsequent receipt of goods/services cannot be
guaranteed, a prepayment is considered a gift of
public funds.

The State
Controllerís Office requires claims presented
for payment to include a penalty of perjury
certification that the services were rendered
and the supplies were delivered. (See Claim
Schedule, STD. 218 Cont., 218DD, and 218ET.)

Advance payments
must be specifically authorized by statute
(State Contracting Manual Section 7.32). The
following advance payments are permissible:

Any
department which, as a part of
its regular operations, performs
work for other departments may
require payments in advance
(Government Code [GC] Section
11258; State Administrative
Manual [SAM] Section 8471.1)

Advance
payments between departments are
permissible to mitigate an
adverse effect to the
appropriation of the performing
department (GC Section 11257;
SAM Section 8453).

Subject
to all federal provisions and
Department of Finance approval,
departments may advance payment
of federal block grants to
contractors or local governments
(GC Section 16366.7).

2. Can
departments pay claims against reverted appropriations
from current appropriations? Does Department of Finance (Finance)
need to approve reverted year claims?

Departments may pay claims against reverted
appropriations from any current appropriation available
for the same purpose, e.g., a claim against a reverted
support appropriation may be paid from a current
support appropriation (GC Section 16304.1; SAM Section 8422.7).

Finance approval is not required for
such claims.

3. Can
departments use current year appropriations to
pay for services and/or goods to be delivered in
the next fiscal year?

Expenditures/encumbrances
are charged to the fiscal year that the
goods/services are delivered when the purchase
agreement stipulates that delivery be delayed
until requested or delayed until on or after a
specific date.

Expenditures/encumbrances
are charged to the fiscal year that the purchase
agreement is issued when the delivery date is
construed to mean as soon as possible. As soon
as possible includes a delivery date that is:

Not
identified or specific.

Specific
but not a requested delay in
delivery.

Specified
as 10 days, 30 days, or the
like.

An agreement is
issued as of the date it is "made and
entered into". Any required control agency
approvals are retroactive to that date.

Agreements which
cross fiscal years may be charged totally to the
first year of appropriation or more than one
fiscal year, depending on the:

The statutory and
regulatory provisions are in GC Sections 8647,
11005-05.1, 16302; and the SAM Sections 1323.12,
8634. Gifts may be either real property or
personal property such as cash or equipment. A
gift of real property must be approved by
Finance after review by the Department of
General Services. (GC Sections 11005-05.1; SAM
Sections 1323.12, 8634) A gift of personal
property must be approved by Finance, except:

Unconditional
monetary gifts which must be
deposited in the State School
Fund (GC Sections 11005, 16302;
SAM Section 8634).

Monetary
gifts where the only condition
is the designation of a
particular fund in the State
Treasury (GC Sections 11005,
16302; SAM Section 8634).

The invoice amount less taxes is multiplied by the daily penalty rate to arrive at the daily penalty amount. The daily penalty amount is then multiplied by the number of days the payment is late to calculate the total penalty amount. The number of days the payment is late is the number of calendar days between the payment due date and the date payment is issued. The payment due date and penalty rate is determined as follows:

The
California Prompt Payment Act (Act) requires State departments to automatically calculate and pay late payment penalties if they do not make payments for the following: 1) properly submitted, undisputed invoices; 2) victim services or prevention program grant claims; 3) refunds; or 4) other undisputed payments due to individuals, by the date required in the Act.

The payment due date is 45 calendar days of receipt of the invoice or from notice of refund or other payment unless otherwise specified in a contract or grant. State departments shall pay penalties if a correct claim schedule is not submitted to the Controller within 30 calendar days and payment is not issued within 45 calendar days. The Controller shall pay penalties if payment is not issued within 15 calendar days of receipt of the correct claim schedule and payment is not issued within 45 calendar days. Payment is defined as the issuance by a warrant or a registered warrant by the Controller, or the issuance of a revolving fund check by department. Departments must pay the applicable penalties without requiring an additional invoice for the penalty amount (GC Section 927 et seq.).

The Act requires different rates for penalty payments as follows:

Small
Businesses, Nonprofit Organizations and Nonprofit Public Benefit Corporations (may include grantees for victim services and prevention programs): the penalty rate, per annum, is a rate of 10 percent above the United States Prime Rate on June 30 of the prior fiscal year. However, a nonprofit organization shall only receive a penalty payment if it has been awarded a contract or a grant for victim services and prevention programs that is less than $500,000. Penalties of $10 or less will not be paid. (GC Sections 927.6 and 927.7; SAM Section 8474 et seq.).

Other
Businesses (including local government grantees that provide victim services and prevention programs): the penalty rate, per annum, is 1 percent above the Pooled Money Investment Account daily rate as of June 30 of the preceding year. Penalties of $100 or less will not be paid. (GC Section 927.6; SAM Section 8474 et seq.)

Refunds
and other payments due to individuals: the penalty rate, per annum, is 1 percent below the Pooled Money Investment Account daily rate. Penalties of $10 or less will not be paid. (GC Section 927.13: SAM Section 8474 et seq).

The penalty
payment is charged to the fiscal year based on the payment due date.

Penalties
calculated using a payment due date in the prior fiscal year (prior July 1 to June 30) are prior year expenditures. The penalty is calculated at the prior year rate and paid from a prior year appropriation.

Penalties
calculated using a payment due date in the current fiscal year (July 1 forward) are current year expenditures. The penalty is calculated at the current year rate and paid from a current year appropriation. Note: Current year penalties are not payable until a current year Budget Act has been enacted.

6. What
is the definition of equipment? What costs
are recorded in the property register?

Equipment is defined in the Property
Accounting section of the SAM as all tangible and
intangible personal property that meets the capitalization
criteria set forth in the SAM section 8602.

The acquisition cost
of all property, capitalized and non-capitalized,
is included in the property register. All costs to acquire, install,
and prepare property for its intended use are included in the acquisition
cost. This amount is used to determine if the property meets the
capitalization criteria. See SAM sections 8615 and 8635 for further
criteria on intangible and internally generated intangible assets.
The capitalized segment of the property register also serves as the
subsidiary ledger to the Capital Assets Group of Accounts (SAM section
8600 et seq.).

7.
What is a Payee Data Record (STD. 204) and why
must the payee complete it before the State can
make a disbursement?

A Payee
Data Record (STD. 204) is a form the State
requires of any non-governmental entity entering
into a business transaction that may lead to a
payment from the State. If a payment is
reportable to the Internal Revenue Service
and/or the Franchise Tax Board, the State
prepares an information return for the Taxpayer
Identification Number (TIN) provided by the
payee on the STD. 204. The TIN for an individual
or a sole proprietor is his/her Social Security
Number. (Internal Revenue Code Section 6109(a);
Revenue and Taxation Code Section 18646; SAM
Section 8422.19 et seq.)

8.
Why is the State exempt from the Utility Users
Tax assessed by local governmental entities?

Cities
and counties possess the power to levy utility
users taxes; however, that power is limited in
application to the State. As a general
principle, it has long been declared that the
State is ordinarily regarded as exempt from
taxes imposed by a local entity. Therefore, the
Legislature must expressly limit or waive the
Stateís immunity for the State to be subject
to local taxation.

9.
Is there
a glossary or a definition for each expenditure
object code listed in the Uniform Codes Manual (UCM)?

No,
there is no glossary or definition for the
object codes. The State accounts and reports on
a budgetary basis. As such, departmental budget
staff establish allotments for object codes and
the expenditures should be consistent with the
budgetary allotments. In addition, comparability
should be maintained from year-to-year.

10.
Can
departments issue agency checks when the current
year Budget has not been passed?

Yes, departments
can disburse general cash to:

Issue
refunds (SAM Section 8095).

Remit
money to the State Treasury (SAM
Section 8091).

Purchase
or buy back dishonored checks
from the bank (SAM Section
8043).

Departments can
disburse revolving fund cash for:

Prior
fiscal year payments (SAM
Section 8110).

Payment
to an employee for salary earned
when errors or delays prevent
the payroll warrant from being
delivered (SAM Section 8595).

The CAL-Card
rebate is a performance bonus that is
distributed by the credit card company to
departments for timely payment of
invoices. Because the rebate cannot be
identified to a specific invoice or vendor, the
bonus will be classified as Miscellaneous
Revenue for those departments whose primary
funding source is a governmental cost
fund. Departments whose primary funding
source is a nongovernmental cost fund will use Operating
Revenue, Other.

12.
How do departments obtain FSCU approval, as
required by some sections of the State
Administrative Manual (SAM), or fiscal policy
clarification/assistance? How long does the
process take?

The
Accounting Officer must submit a written request
on departmental letterhead to:

Fiscal
Systems and Consulting Unit,
IMMS A-15Department
of Finance

915
L Street

Sacramento,
CA 95814

The request must
include all pertinent information necessary to
review the request such as:

Description
of request;
including
description of
current process
if change is
proposed

Information
required in
applicable SAM
section

Justification
for request

Listing
of costs and/or
dollar amounts
involved

Completed
forms, if
required (e.g.,
form AUD-10 for
Special Deposit
Fund accounts)

Contact
name, e-mail
address, and
telephone number

Please include the e-mail address and
telephone number of a contact person so that
we can acknowledge the receipt of your request.
The request will be assigned to an analyst for
review. A written response will be provided
in approximately 3 to 4 weeks.

13.
Is FSCU
responsible for the content in all sections of
the State Administrative Manual (SAM)?

No, FSCU is only
responsible for specific sections of SAM. The
responsible department and contact person for
all SAM sections are listed in SAM
Section 0030.